‘General’ News
Consumers urged to fight bank charges
Posted 2008-05-6
Consumers are being urged to fight against allegedly unfair bank charges that could have blotted credit ratings.Marc Gander, founder of the Consumer Action Group, has claimed that if customers did challenge the charges against them and won, the result would be a nightmare for banks and could cost them large sums of money.He pointed out that black spots appear on peoples credit rating if they have exceeded their overdraft limits which could affect a persons ability to secure funding in the future."Anybody who has had a bank charge, meaning that they have exceeded their overdraft limit, has this black mark put on their credit record. Your whole existence is compromised - its a savage blow," he said.For that reason, Mr Gander is pushing people to challenge any charges they feel to be irregular which would be "super expensive and a super nightmare" for banks.The Office of Fair Trading recently won the right to investigate whether overdraft charges issued by banks are excessive or not....
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Research shows current account ‘ignorance’
Posted 2008-05-5
More than 25 per cent of people in the UK have only ever had one current account, new research has found.A survey by Moneysupermarket.com has claimed that ignorance and disinterest are costing people dearly when it comes to earning interest on their accounts.Despite heavy advertisements, nearly 75 per cent of respondents knew little about the competitive rates being offered by Halifax, Alliance and Leicester and Abbey.Kevin Mountford, head of savings at Moneysupermarket.com, believes consumers must shop around in order to secure a good deal."Its a shame consumers seem hesitant to change current accounts as most providers make the process as easy as possible. If you could buy the same TV for £210 less somewhere else, you wouldnt think twice, however when it comes to current accounts, it seems consumers are happy to miss out," he said.People in the north of the country were found to change their accounts the least, with 31 per cent saying they have only ever had one account.Moneysupermarket.com is a price comparison site that allows shoppers to evaluate insurance and other products on the market....
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Personal bankruptcies increase
Posted 2008-05-5
The Insolvency Service has claimed that personal insolvencies across England and Wales have risen for the first time since 2006.Individual cases for the first quarter of 2008 included 15,651 bankruptcies and 9,614 individual voluntary agreements (IVA), totalling 25,264 and representing a 1.7 per cent increase on the previous quarter.Mike Gerrard, a personal insolvency partner at Grant Thornton expects the number to rise by the end of the year as the effects of the credit crunch are felt by more people."Although some individuals showing up in the latest insolvency figures will have done so because of financial difficulties brought about by the global downturn, it wont be until later this year or early next that we will see the full extent of the credit crunch on UK individuals," he said.Bankruptcy is one way a person can deal with debts they can no longer service and it involves their assets being shared amongst creditors, according to the Insolvency Service....
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CAG: High likelihood the OFT will find against the banks
Posted 2008-04-30
Following the landmark ruling by the high court, that allows the Office of Fair Trading (OFT) to investigate overdraft charges imposed by banks, the founder of the Consumer Action Group (CAG) believes the body will almost certainly find that they are unfair.Marc Gardner noted that should the office come to this conclusion, there will likely be an appeal which could see the court of appeal overrule or rdefine the high courts decision.He said it was unlikely that the banks themselves will decide to refund customers voluntarily, and predicted a slow process which will probably see many people never being reimbursed."I cannot believe for one moment that the OFT will say to the banks that theyve got to put their hands up, investigate their databases, contact everybody theyve taken money from and refund it. My personal view is that there will be a repayment scheme agreed between the FSA (Financial Services Association) and the banks," Mr Gardner stated.According to estimates from the BBC, banks refunded nearly £748 million to over 378,000 people last year....
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Young Brits could be heading for bankruptcy
Posted 2008-04-29
Young people in Britain could be pushing themselves closer to bankruptcy due to overspending, a personal finance expert has warned.New research by Monilink has found that over a quarter of people aged between 16 and 34 years old are in competition with their friends over purchasing the latest gadgets and fashion items.The survey found that 21 per cent of respondents would prefer to spend their money on personal items rather than save it, while 22 per cent admit to having built up too much debt and are now finding the repayments a strain.Cliff DArcy, a personal finance writer, used the term "Bling-itis" to describe this trend."This Bling-itis is edging them towards bankruptcy. Two-thirds of these young people have admitted that they are still trying to clear credit card debts that they built up two years ago," he said.Debt charity Credit Action recently reported that personal debt in the UK grew by £113 million over the last 12 months....
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Pensions ‘most enquired about sector’
Posted 2008-04-29
Pensions are the most commonly enquired about sector for consumers to seek independent advice on, reports an expert.IFA Promotions has said that this may change in the current climate, with more people asking about mortgage problems.David Elms, the chief executive of the organisation, said that its enquiries come from a wide variety of people who are typically "middle-to-top" income levels.Since the pension reforms of so-called A-Day, on April 6th, the number of enquiries in this area has risen."Demand for pension advice rose at A-Day, and remains higher than it was previously. Savings and investments come second, mortgages come third, and then the rest," said Mr Elms.He went on to describe the current mortgage market as "volatile", adding: "It would seem reasonable to assume that mortgage advice is going to be valued more in current conditions".A-Day was when the UK pension rules were changed to allow investors to be a member of a company pension and a private scheme at the same time....
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Charities support new PPFP initiative
Posted 2008-04-28
The IFS School of Finances Programme in Personal Financial Planning (PPFP) has been praised by debt charities.Working Links, Credit Action and The Resolution Foundation have all voiced their support for the programme, which looks to teach students about personal finance management.The course covers five areas, which are, making ends meet, planning ahead, choosing financial products, staying informed about financial matters and keeping track of finances.Deputy director of Credit Action, Chris Tapp, believes the programme is much needed."Credit Action is always on the look out for quality programmes which can have a genuine impact in helping people to manage their finances better. The IFS School of Finances PPFP does that and we are therefore pleased to support it," he said.The school works closely with the financial services industry and offers education and to professionals across the world. ...
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Debt management offers “short-term” solution
Posted 2008-04-27
The number of court orders seeking to secure personal debt, such as loans, against peoples properties has increased by 42 per cent in a year, new figures have shown.Statistics from the Ministry of Justice (MoJ) reveal that the number of applications for charging orders, whereby a persons debt is paid once their property has been sold, applications filed by banks in 2007 was 131,644.Nathan Gladwell, from Chiltern Debt Management, believes consumer spending habits need to be reviewed and suggested that debt management solutions can offer some relief to those with serious debts."People struggling with their finances need to readjust their spending to more realistic levels and be open to alternative options. Options like debt management can offer a valuable short-term solution whilst debts are brought under control, and they ensure that debts are prioritised," he said.The increase in the number of charging orders is predicted to grow further as banks look to secure lent funds.Chilterns monthly debt monitor recently found that the level of debt per person in the UK fell by £400 from the beginning of the year....
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Saving cash at home
Posted 2008-04-27
New research has found that one in ten people in the UK would feel more comfortable saving their cash at home.While the majority of those questioned by the Newcastle Building Society preferred to keep their money in a building society, with 34 per cent or respondents saying so, the number of people preferring to keep their money at home has risen to 11 per cent.Last year, a survey found that banks and buildings societies were the most secure places to keep money, with 28 and 46 per cent respectively.Recent research has shown that confidence fall by 17 per cent and Wendy Lee, commercial director at the building society, believes peoples fears may be misplaced."With some attractive savings products available, you might think people are barmy to stash their cash at home. Unfortunately, some savers now have an exaggerated view that investing their money with a building society or bank can be a risky business, which is not the case," she said.The Midlands and Wales were found to have the most people keen to keep money at home, with figures of 15 per cent.A savings expert recently claimed that more and more young people are saving their money rather than spending it....
OFT pleased with overdraft charges ruling
Posted 2008-04-23
The Office of Fair Trading (OFT) has welcomed the decision by the high court that it can regulate overdraft charges imposed by banks.In a test case brought by the OFT and eight banks, Mr justice Andrew Smith stressed that the banks charges were not necessarily unfair but the ruling paves the way for enquiries into them.However the judge did reject the offices claim that the banks terms and conditions were unintelligible.In a statement, the OFT said it will work with banks to make sure that the market is fair for consumers, but was pleased with the judges ruling.This is an important early milestone for the OFT and our investigation into this area of high consumer interest. We are now analysing the implications of the judgement for our overall investigation into the fairness of the terms, it stated.It is estimated that banks earn up to £1 billion annually from unauthorised overdraft charges.Barclays, HSBC, Clydesdale, Lloyds TSB, the Royal Bank of Scotland, HBOS, Abbey and the Nationwide building society were the institutions involved....